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Telematics has been in the fleet driver business for a number of years as an operational tool, but more and more it can be used as a tool to reduce risk, improve road safety and increase customer retention by carefully managing fleet drivers’ behavior. (Credit: WR7/Shutterstock) Telematics has been in the fleet driver business for a number of years as an operational tool, but more and more it can be used as a tool to reduce risk, improve road safety and increase customer retention by carefully managing fleet drivers’ behavior. (Credit: WR7/Shutterstock)

In recent years, fleet insurance has presented an increasing number of challenges for the insurance sector. While the exposure risk has always been higher with commercial fleets compared to personal lines, a number of growing factors have made it steadily more challenging to make meaningful profits in commercial auto insurance.

Traditional factors, such as increased exposure risk brought on by multiple drivers, lack of predictability and traceability due to drivers leaving and new drivers joining, and challenging combined ratios, remain. Meanwhile, more recent factors, such as litigation financing, skyrocketing costs of vehicle repair and inflated medical costs, have seen a significant rise in claims being made against organizations for driver-caused accidents and have had a profound impact on fleet insurance over the last few years.

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